Wanted: Entrepreneurs to help end poverty

Article by Jim Yong KimAAEAAQAAAAAAAAsgAAAAJGM1NjhjMTVmLTY0ZTItNDlkMy05MzhhLTQzMmI3NDM3NTEwOA

In many developing countries, governments struggle to reach people living in extreme poverty and bring them into the formal economy. But even in the toughest places, a special kind of entrepreneur is doing what governments often can’t.

Using innovation and technology, they’re delivering critical goods, services, and jobs to poor and marginalized populations — including essentials like clean water and energy, sanitation disposal in slums, and last-mile health services. They’re also providing rapid IT skills training for youth and agriculture services to improve the incomes of smallholder farmers, and helping reduce violence against women.

These “social entrepreneurs” combine the mission of a non-profit with the discipline of a private business. I’m honored to meet some of them this week at the Skoll World Forum on Social Entrepreneurship at the University of Oxford’s Saïd Business School.

I couldn’t agree more with the Forum’s goal – to advance entrepreneurial approaches and solutions to the world’s most pressing problems. Without the participation of the private sector, it will be impossible for us to meet the ambitious Sustainable Development Goals by 2030.

Fueled by their passion for impact, social entrepreneurs can be particularly effective in developing countries, and their enterprises are achieving results. Here are few examples:

  • Mobisol, a for-profit social enterprise, provides homes in Rwanda and Tanzania with affordable solar systems. Using an innovative lease-to-own business model and mobile money payments, Mobisol has reached more than 70,000 households. IFC, the World Bank Group’s private sector arm, has invested over 5 million euros in the company.
  • Waterlife, also a for-profit social enterprise, uses technology to provide affordable drinking water to underserved populations in South Asia and Sub-Saharan Africa. Through a small grant and capacity building support from the World Bank, Waterlife scaled its model in the poorest states of India. Today, it has 600 sites reaching more than 7 million customers.
  • Also in India, the Aga Khan Rural Support Programme has worked with 20,000 farmers to help them reduce agriculture costs. The program trained farmers to prepare and use organic fertilizers, and to professionally market them for additional income. Fifty female farmers have been trained as micro-entrepreneurs, and they are producing and selling organic fertilizers – and making a profit.

Since 1998, the World Bank Group has awarded $132 million in competitive grants through the Development Marketplace program and supported global agendas on inclusive businesses as part of the G20 Action Plan.

Social entrepreneurs achieve high social and economic impact by using innovative business methods to create jobs in low-income or fragile and conflict-affected markets. Because of their strong understanding of the communities they serve, social entrepreneurs will often innovate and iterate to develop a business model that is cost-effective, but also provides value for money in low-income markets. Their products must be validated by their customers for the enterprise to stay in business.

These factors enable social entrepreneurs to effectively address critical challenges. For example, they have developed models to help refugee communities integrate into the countries where they’ve taken refuge. The approach includes:

  • Improving skills and employment opportunities, supporting refugee entrepreneurs, and integrating refugees into local labor markets. For instance, introducing tech skills through a boot camp model followed by on-the-job training can provide the enterprise with a source of revenue to subsidize the education of new students.
  • Improving security and reducing violence against women and children through innovations that use technology and community-driven solutions to promote behavioral change. These solutions include mobile-enabled outreach campaigns, alert systems, and help for victims have been implemented in refugee camps in Kenya.
  • Addressing service delivery gaps. Refugees creating jobs to provide services to other refugees can play an important role in healing and empowering the community. Moreover, these are jobs that do not displace employees in receiving countries nor burden stretched public services.

Social enterprises also help address the root causes of conflict by building more resilient communities with sustainable livelihoods. Other World Bank Group efforts, such as a $300 million program in Jordan, seek to allow refugees to work during their time in host countries, which would complement social enterprise approaches.

As a global development bank, the World Bank Group has the ability to scale up promising ideas, turning local pilot projects into large-scale regional or global initiatives. We need to support entrepreneurs in developing countries who face challenges in launching high-growth companies.

We are facing a volatile and uncertain environment where challenges like forced displacement, inequality, violent extremism, and climate change threaten to roll back decades of progress. Only by harnessing the power of the private sector in new ways can we overcome those challenges and ensure there is stability and opportunity for all.

 

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